Metal shredder residue would be the single biggest hazardous waste stream in the state—if the state’s toxics regulators classified all of it that way. Why the Department of Toxic Substances Control has failed to do so is the subject of a decade-long debate, which calls into question the department’s effectiveness. Vicky Nguyen reports in an ongoing series about environmental regulation. This story aired on September 5, 2013 (Published Thursday, Sept. 5, 2013)

State toxics regulators have failed to revoke a special privilege granted to the metal shredding industry, despite warnings from one of the department’s top scientists and a mandate from the former director. Now, more than a decade after the warnings, new leadership at the state department says the issue will undergo yet another review, delaying any decision until October 2014. Critics say it’s another example of dysfunction and an inability to make decisions at the Department of Toxic Substances Control — the state’s key regulator of companies that pollute.

“They cannot make a decision — it’s very, very difficult for them,” former DTSC director Maureen Gorsen said, describing what she sees as fundamental failures in the department’s organization and effectiveness. “You don’t see them prioritizing what is impacting the most Californians, what is the highest public health risk, risk to the environment. They are all equally important, therefore nothing is a priority and nothing gets done.”

In 1988, the DTSC exempted California’s seven largest metal shredders from hazardous waste laws because the department believed that if companies treated their waste with a protective coating, it would become nonhazardous, and therefore eligible for disposal in landfills. Since then, a growing chorus of citizens and advocates, high-level scientists and even the former department director have said that the treatment that’s supposed to make the waste safe does not last, eventually allowing pollutants like cadmium, zinc, and PCBs to leach into the environment.

Whether to take away the hazardous waste exemption is a debate that’s dragged on for nearly two decades. Critics say the delay is a glaring example of the dysfunction that exists within the $189-million state department.

Cars and appliances end up at metal shredders at the end of their life cycles. Shredding facilities, including one operated by Sims Metal Management in Redwood City and another run by Schnitzer Steel near the Port of Oakland, crush the junk into small chunks of metal, sell the scrap for profit and bring in roughly $500-million a year. Recyclers treat the leftover sludge — called “fluff” — with a cement coating, which allows them to dump the waste in regular landfills as opposed to hazardous waste disposal sites.

“You have gas tanks with residual gas in it and fumes on it, you have motor oil on parts, steering column fluids, brake fluids, metal parts that are painted,” said Jesse Marquez, president of the Coalition for a Safe Environment and resident of Wilmington, a city near a Southern California shredder. “It is toxic and hazardous because we have identified lead and other chemicals that are part of that scrap metal process.”

Shredders dispose of roughly 700,000 tons of fluff in landfills every year. If the DTSC classified the residue as hazardous waste it would be the single biggest hazardous waste stream in California, ahead of used motor oil and contaminated soil.

In an October 2001 confidential legal opinion obtained by the Investigative Unit, DTSC attorneys stated that the department’s policy on shredder waste, which included the exemptions it granted to the industry, is “outdated and legally incorrect.” The report goes on to state that shredder waste “becomes a hazardous waste as a result of the shredding process.”

In a November 2002 report, department scientist, Peter Wood, recommended that the DTSC “rescind all previously issued nonhazardous waste classifications for treated shredder waste.” He studied treated shredder fluff and found that at least two facilities exceeded the state’s threshold for zinc and cadmium and that varying levels of PCBs were found in all the samples he tested.

Six years later, Gorsen, the department’s director from 2006 to 2009, took action.

“At that point we had determined that the waste needed to be treated as a hazardous waste,” Gorsen said.

In September 2008, Gorsen sent a letter to the shredder industry stating that the DTSC would stop allowing treated fluff to be classified as nonhazardous.

“DTSC has been testing and analyzing automobile shredder waste for several years and has regularly disused its findings with California’s automobile shredder industry representatives,” the letter stated. “Those results have shown increased levels of hazardous constituents in the shredder waste.”

The letter stated that the policy needed to repealed and that the “wastes need to be managed as hazardous waste to ensure the safety of public health and the environment from harmful exposures of toxins.”

Gorsen said the DTSC never executed her directive after she left the department in 2009. The DTSC still hasn’t classified the treated fluff as hazardous. Gorsen points to what she calls organizational management failure, and the department’s inability to make decisions, as two reasons for the delay.

“Everything I tried to do to fix the department was basically tossed out within three weeks of my departure,” Gorsen said. “There is no accountability for an end to end process and making decisions and conclusions.”

Current DTSC director Deborah Raphael, who was appointed in 2011, says the department is still trying to determine if it will rescind the exemptions. When asked for a yes or no answer to the question “Is [shredder waste] hazardous?” Raphael said, “Well that’s not a simple question to answer. Once its treated we believe it is no longer hazardous.”

But when pressed about the department’s own report that said treated shredder waste is hazardous, Raphael acknowledged that the exemptions are “old and out of date” and that the department “needs to revisit them” but would not commit to revoking them.

It doesn’t help that industry lobbyists fought the changes. Looking at the money, it’s easy to see why.

According to the DTSC the seven shredders collectively pay about $35,000 a year in generation fees to dispose of shredder fluff in regular landfills. If the waste was considered hazardous, the generation fees would jump to $528,000 a year.

Industry representatives declined requests to talk on the record about this issue, but in letters to the state they said that if the DTSC changed the rules there would be consequences. In a letter to the DTSC legal office in October 2008, industry lobbyist Margaret Rosegay wrote that Gorsen’s declassification mandate was “wholly untenable” and that the decision would mean “massive increases of vehicle miles traveled and associated greenhouse gas emissions, cost increases, job losses, and radical changes to disposal practices.”

The industry has maintained that treated auto shredder residue is safe and in a letter the following May Rosegay wrote that the DTSC has “not come forward with any evidence of any threat to human health or the environment from management of treated auto shredder residue as a nonhazardous waste.”

As the DTSC continues to debate whether to rescind the exemptions, Gorsen says the only way to address the department’s failure to act on issues such as shredder waste is for lawmakers to step in and restructure the department.

“Nobody is responsible. It’s like a giant assembly line with no beginning and end and people are just assigned a spot on it,” Gorsen said. “It’s a fundamental management problem.”